Case Number: ITA 185/DEL/2021
Appellant: Rajeshwara Rao Peri, Vishakhapatnam
Respondent: CIT(A)-TDS(2), Delhi
Assessment Year: 2013-14
Result: 2013-14
Case Filed on: 2021-03-08
Order Type: Final Tribunal Order
Date of Order: 2023-04-12
Pronounced on: 2023-04-12
The appellant, Rajeshwara Rao Peri, was working as Ex-Chief Manager at Oriental Bank of Commerce. He was removed from his position via a Disciplinary Proceedings order dated 27.06.2003. The appellant challenged this removal by filing a writ petition (no. 9308/2004) before the Hon’ble Delhi High Court. On 21.08.2013, the High Court set aside the removal order and modified the punishment, entitling the appellant to pension, gratuity, and leave encashment.
During the appeal, the bank deposited Rs. 46,70,066/- before the High Court as arrears of wages, leave encashment, gratuity dues, monthly pension, and commuted value of pension. Based on a settlement agreement, Rs. 22,01,608/- was released to the bank, and Rs. 24,68,458/- was released to the appellant.
The appellant forewent Rs. 22,01,608/- as part of the settlement, and the bank reversed the TDS deduction of Rs. 11,06,499/- on this amount.
The appellant filed a Civil Miscellaneous Application (no. 27897/2015) seeking the release of the TDS amount of Rs. 11,06,499/-. The High Court directed the Income Tax authorities to consider the appellant’s eligibility for relief under Section 89 of the Income Tax Act, 1961.
The appellant then filed a grievance before the DCIT-76(1), New Delhi, asserting that the TDS should not have been deducted since the amount was foregone as per the settlement agreement. The DCIT ruled that there was no liability to deduct TDS, and thus, no default was found under Section 201(1) of the Act.
The appellant approached the CIT(A)-TDS(2) under Section 263 of the Act, which was dismissed as non-maintainable. The appellant then filed an appeal before the Income Tax Appellate Tribunal.
The Tribunal, after hearing both sides, determined that the appeal was not maintainable as the appellant was neither an ‘assessee’ nor an ‘assessee in default.’ Furthermore, the Tribunal noted that TDS is required to be deducted at the time of payment, and in this case, no payment was made as the amount was foregone under the settlement agreement.
The Tribunal dismissed the appeal, concluding that the grounds raised by the appellant lacked substance.
The appeal by Rajeshwara Rao Peri against the order dated 07.01.2021 by CIT(A)-TDS(2) was dismissed by the Income Tax Appellate Tribunal. The Tribunal ruled that TDS was not liable to be deducted on the accrued amount that was later foregone as per the settlement agreement.
Order Pronounced: 12th April 2023
Judges: Shamim Yahya, Accountant Member, and Anubhav Sharma, Judicial Member
Rajeshwara Rao Peri vs. CIT(A)-TDS(2), Delhi – 2013-14 TDS Dispute
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